Walgreens Boots Alliance (NASDAQ:WBA) experienced a 24% drop intra-day today after the retail pharmacy chain reported disappointing Q3 earnings and revised its full-year guidance downward.
For Q3, Walgreens reported an EPS of $0.63, which missed the Street estimate of $0.71. However, revenue slightly exceeded expectations, coming in at $36.4 billion compared to the anticipated $36 billion.
Looking ahead, Walgreens adjusted its full-year EPS forecast to a range of $2.80 to $2.95, down from the previous projection of $3.20 to $3.35. This revision reflects challenges in the pharmaceutical sector and a weakening consumer environment in the U.S.
In response to these challenges, Walgreens plans to close a significant number of underperforming stores and scale back its primary-care business expansion. CEO Tim Wentworth said that the company will review approximately 25% of its 8,600 U.S. stores and potentially close a “meaningful percent” of these unprofitable locations over the next few years.
Additionally, Wentworth indicated that Walgreens will reduce its ownership stake in primary-care provider VillageMD, relinquishing its majority control, though the company will maintain some of its other business units. There are currently no plans to sell its international pharmacy chain Boots or specialty pharmacy firm Shields Health Solutions.